Federal financial aid for college will be easier to apply for – and a bit more generous

The new application for study grant will contain fewer questions. zimmytws / iStock via Getty Images Plus

Editor’s note: The free federal student grant application – better known as FAFSA – is simplified by the collective spending law passed in December. The FAFSA is what students must complete in order to receive Pell Grants, student loans, and many other types of state and college financial aid. Here Robert Kelchen, an expert on university policy, explains what simplification and other changes mean for students and families.

By Robert Kelchen, Associate Professor of Higher Education, Seton Hall University

How will the application for federal student grants change?

The good news is that FAFSA will move from 108 to 36 questions, leaving most students only to answer a smaller number of questions about family income and household size. The less good news is that this simplified form will not be available to students until October 2022 to determine the grant for the 2023-24 academic year.

Students with family incomes less than 175% or 225% of the state poverty line (which depends on their family circumstances) automatically qualify for the Pell Maximum Scholarship, which is the main government grant for low- to middle-income students. Income families from 2023.

For example, a high school graduate in a family of three led by a single parent would receive the maximum Pell grant if their parents’ income is less than about $ 50,000 a year. Currently, only about one in five students with a family income of about $ 50,000 per year will receive the maximum Pell Scholarship. Currently, most students must submit FAFSA to know their Pell scholarship amount.

Automatic qualification will make it easier for students to know early how much federal funding they can get before they go to college.

Do new people come into question who weren’t before?

The new law also removes the 1994 ban on Pell Grants for detainees. This change means people can get financial aid to graduate from college while they are behind bars, rather than waiting to be released. This change will benefit everyone as training while in prison will reduce the likelihood of someone returning to prison.

It will also reset Pell Grant eligibility for students who have attended colleges that were closed during their visit. This means that these students can finish their studies elsewhere. Without this change, anyone who had exhausted their Pell eligibility after 12 semesters would likely have trouble finding the money they need to complete their degree from another college.

Is the “expected family contribution” a thing of the past?

More or less. Since 1992 the FAFSA has made an “expected family contribution”. This number determines how much money students and their families can receive in federal grants. It is based on how much money the federal government expects students and their families to pay to contribute to the price of their education.

However, families are often unable or unwilling to pay this amount of money. The formula has also been adjusted over the years to reduce the number of students who receive the maximum Pell grant, so families have to pay more for college. In reality, the expected family contribution provides a rough ranking of the family’s resources to help the federal government and others provide limited aid.

From October 2022, the government will abandon the term “expected family contribution”. Instead, it relies on a “Student Aid Index,” the same term used before 1992 that more accurately reflects how the FAFSA is used to determine financial aid. Nor does the index send the message that students have to contribute a certain amount.

But in reality, the Student Aid Index is still what the federal government expects students and families to spend on college.

Good news for students and their families, the law allows the student aid index to drop to $ 1,500 instead of being capped at zero. This is something I have advocated in my research because it enables students to get more financial aid and helps colleges and states identify students in greatest financial need. The change to the Student Grant Index will no longer provide students with financial assistance from the federal government, but will allow them to receive up to $ 1,500 more in grants, loans, and other grants from other sources.

Is the government increasing federal student grants in any way?

The government is also increasing the Pell maximum grant to $ 6,495, an increase of $ 150 in the 2021-22 academic year. This is basically enough to keep pace with inflation. One major change is that due to the increase in income limits for receiving the scholarship, more students will qualify for the Pell maximum scholarship. But as more students will receive federal scholarships, students in greatest financial need will not see their Pell scholarships increase except to keep up with inflation.

This article was republished by The Conversation under a Creative Commons license.

source https://collegeeducationnewsllc.com/federal-financial-aid-for-college-will-be-easier-to-apply-for-and-a-bit-more-generous/